Analysts predict this for Ethereum as demand drops significantly

Macro factors have severely strained the performance of cryptocurrency assets. Thus, this leads to a cascading effect on their prices. For example, the second-largest cryptocurrency Ether fell nearly 5% in the past week, dropping to $3,000. The asset has lost nearly 40% of its value since hitting an all-time high in November. As a result, many analysts were forced to reconsider the bullish perspective they had previously taken.

In fact, the most recent Ethereum price forecast report from Finder.com is “much more bearish”. Oddly enough, the analysts have significantly lowered their price expectations compared to the previous forecasts. Interestingly, the October report had predicted that the ETH would reach $5,144 by the end of 2021. However, at the time of the second survey in January, the ETH was well below that price.

The analysts now expect a year-end price of $6,500 for ETH, with a target of $10,810 for 2025 and $26,338 for 2030. The report continues:

“The panel’s prediction of the value Ethereum could reach by 2030 has been significantly reversed. The positive outlook for price growth in the cryptocurrency market was heavily influenced by increasingly strict international regulations and declining current values in early 2022.”

For example, CoinFlip founder Daniel Polotsky thinks the ETH price will hit just $4,000 by the end of 2022. Primarily because of the rich performance of its competitors. It should also be noted that the current utility of ETH relies on the success of Layer 2 solutions such as Polygon, which Daniel believes will extract much of the value from ETH. Some credence can be given to this outlook by looking at the price increases of both assets over the past year. Polygon’s MATIC rose about 1394% during this period, compared to ETH’s modest 62% gain.

Polygon has become an integral part of the Ethereum ecosystem in 2021. MATIC has branched out on its own, and analysts fear it could compete with ETH in the future.

Ethereum’s high transaction costs have recently come down. On February 13, it even reached its lowest level since July last year. Even if it is for all the negative reasons. According to Santiment, this drop in fee is due to the price drop that ETH has been dealing with lately. And also because of the subsequent decline in demand for ETH trades.

💸 With #Ethereum fall back below $3,000, the demand to make $ETH transactions has remained relatively low. And with that, transaction fees are now officially at their lowest level since July 28, 2021. Low fees typically maximize the chance of a bounce. https://t.co/zTg2CSd3xO pic.twitter.com/qTO2vao940

— Santiment (@santimentfeed) February 13, 2022

Similarly, a significant drop in the number of large token holders on the network has recently been noted, indicating that large ETH holders may be leaving the network en masse. Addresses over 1,000 ETH have hit lows not seen since 2018. This indicates that the price dip is accompanied by whale dumping.

#Ethereum $ETH Number of addresses with 1k+ coins just hit a 4-year low of 6,226. reaches

Previous 4-year low of 6,228 was observed on February 11, 2022

View metric: https://t.co/iDNXAbbLRt pic.twitter.com/xIVj5DubUQ

— glassnode alerts (@glassnodealerts) February 13, 2022